#OlympusDAO's natural #OHM token, which has taken the market by storm, has risen by only 95.8% this week and 31.1% in the past two weeks. OHM is also trading with strong gains on the 24-hour chart. With a market capitalization of only $ 76 million, OlympusDAO may have gone unnoticed by many investors, according to popular analyst Reynaldo Marquez. However, according to the analyst, the altcoin project has a mechanism called #Bonds, which promises to be the most important and profitable in the #DeFi industry.
🧐What is the altcoin project OlympusDAO (OHM) and what does it do?
According to research firm #Messari, this protocol tries to create a stable currency that supports every OHM with DAI and OHM-DAI. The goal is to provide a currency with "fundamental control over inflation" and undiluted purchasing power. Unlike Tether and other stablecoins , OHM is not tied to any other asset.
Source: Messari
Its stability is achieved through the DAO (Decentralized Autonomous Organization) when it changes variables to achieve greater profitability for the stakers. This is done through the contract of sale connected to the treasury of the protocol and a liquidity pool (OMH-DAI) on the decentralized exchange Sushiswap, as shown below. Messari explains the point:
WHEN OHM TRADES OVER 1 DAI, THE PROTOCOL MINTS AND SELLS NEW OHM. WHEN THE OHM TRADES BELOW 1 DAI, THE PROTOCOL BUYS BACK AND BURNS THE OHM. IN ANY CASE, THE PROTOCOL PROVIDES A GAIN. OLYMPUS DAO DISTRIBUTES 90% OF THIS PROFIT PRO RATA TO OHM SHAREHOLDERS AND 10% TO A DAO.
↪️How do OlympusDAO bonds work?
Bonds are a treasure component that allows users to obtain liquidity with it, as one OlympusDAO developer explains. When the trade is completed, there is a 5-day progress payment program. During this time, user tokenscan use them, but has incentives to buy them at a discount. The second is determined by the number of bonds in the protocol, more bonds equals a lower discount. Through this mechanism, as the developer says, the altcoin OlympusDAO restricts its own growth to make it “more stable”. A developer made the following statement on the subject: “The liquidity of a bond was locked in the treasury and the new OHM was used to support the dollar. This liquidity now belongs to the market and, accordingly, to the token holders. The more liquidity the protocol generates, the more confident owners can feel.
↘️Developer: A good system should not offer a single opportunity to "succeed"
Users basically contribute to OlympusDAO by adding liquidity. In Retributio, the user gets a reward in OHM at a much cheaper price for a certain period of time. In this way, both the user and the protocol can benefit. Regarding OHM, OlympusDAO LP offers a variety of strategies that they can use to make more profit from the spot market. A developer made the following statement on the subject:
ALL THIS SERVES TO CREATE A LONG-TERM, SUSTAINABLE BOOTSTRAP MECHANISM FOR THE PROTOCOL WHERE THE PARTICIPANTS ARE THE MAIN BENEFICIARIES. A GOOD SYSTEM SHOULD NOT OFFER A SINGLE OPPORTUNITY TO “SUCCEED”; IT MUST OFFER THEM FOREVER WITH DIMINISHING RETURNS. YOU GENERATE WEALTH THIS WAY; SLOWLY, BY COMBINING THE GAINS.